A Sector at the Heart of Tackling Economic Inactivity
The report notes Northern Ireland has the highest economic inactivity rate in the UK (26.5% of working-age population). Key drivers include disability and ill health, caring responsibilities, and rising numbers of young people not in education, employment, or training.
The report explores the unique role of the VCS in tackling economic inactivity and promoting economic inclusion across Northern Ireland.
Drawing on focus group discussions with 34 VCS leaders and practitioners, alongside Pivotal’s wider policy analysis, it highlights the sector’s deep-rooted strengths:
- Deep roots in local communities and high trust with beneficiaries.
- Highly skilled and tailored interventions and the ability to engage those furthest from the labour market, often missed by statutory services.
- Wrap-around, holistic support addressing multiple barriers (health, skills, confidence, childcare, transport).
It notes that VCS programmes funded under UKSPF have supported nearly 24,000 people since 2023, including those with disabilities, lone parents, and carers.
Pivotal’s report sets out 15 conclusions on the immediate challenges facing the sector and its longer-term role in addressing economic inactivity and promoting economic inclusion.
Key findings include:
- The unique value and social and economic impact of VCS programmes in engaging those furthest from the labour market.
- The sector’s potential—if supported with stability, long-term vision, and genuine partnership with government.
- The importance of co-design and integration of the VCS in future strategies and service delivery aimed at tackling economic inactivity.
Timely Intervention is Needed
This report arrives at a critical juncture for voluntary and community services in Northern Ireland. With the UK Shared Prosperity Fund set to end in March 2026, over 60 sector organisations face a looming funding cliff-edge and continued uncertainty around the design and delivery of the Local Growth Fund set to replace current arrangements.
Pivotal’s analysis underscores the urgent need for clarity, co-design, and sustained investment to ensure that vital community-led programmes can continue supporting those furthest from the labour market.
Funding Cliff-Edge and Policy Uncertainty
The report raises urgent concerns about the transition from the UK Shared Prosperity Fund (UKSPF) to the proposed Local Growth Fund. As of November 2025, there remains no clarity on how this fund will be structured or administered. Without immediate action, the report highlights that over 10,900 current beneficiaries and 650 VCS jobs are at risk.
Pivotal recommends:
- A delayed transition to the Local Growth Fund until April 2027 to allow for proper co-design of a bespoke fund for Northern Ireland.
- Multi-year budgets to avoid recurring cliff-edges and support long-term planning.
- Protection of current funding levels, with a commitment to ringfencing and strategic investment.
Measuring Impact Beyond Employment
The report challenges narrow definitions of success based solely on employment outcomes. It advocates for evaluation frameworks that recognise “the distance travelled” by individuals—progress in health, confidence, resilience, and readiness for education or training.
Strategic Importance of the VCS
The report highlights that the VCS is central to delivering many of the Northern Ireland Executive’s Programme for Government priorities—from youth services and justice to health, childcare, and economic growth. The report encourages government to place the sector at the heart of policy design and delivery, not at the margins.
Without sustained investment in the sector, the report concludes that public services and labour market inclusion will inevitably suffer.
You can read the Report in full via this page.
NICVA thanks report author Dr James Greer and Pivotal for this important contribution, and reaffirms its commitment to supporting the Economic Inactivity Coalition and the wider voluntary and community sector, as we continue to press for urgent clarity and resolution on the future of programme delivery in NI beyond March 2026.
About NICVAs #NICantWait Campaign
NICVA’s #NICantWait campaign highlights the vital contribution of the voluntary and community sector in addressing economic inactivity.
It calls for urgent clarity on the delivery of the UK Local Growth Fund in Northern Ireland beyond March 2026, following the end of current UK Shared Prosperity Fund (UKSPF) funding.
The clock is ticking, and our sector simply cannot sustain the impacts of yet another looming funding cliff-edge.
The campaign is calling on the UK Government to:
- Confirm a bespoke delivery model for Northern Ireland, placing the voluntary and community sector at its core.
- Urgently reconsider the proposed 70% capital / 30% revenue funding split, which does not reflect Northern Ireland’s needs or the proven effectiveness of current programmes.
- Agree urgent bridging arrangements from April 2026 to March 2027, to avoid a funding cliff edge and enable adequate planning.
- Commit to genuine co-design with the sector, ensuring transparency and providing clarity on funding levels and timelines.
Without this clarity—and without adequate contingency arrangements—VCS-led programmes face closure by March 2026, putting:
- Thousands of vulnerable people at risk.
- Hundreds of skilled staff at risk of redundancy.
- Many organisations at risk of collapse.
Programmes are already being forced to consider exit strategies, with:
- Disruption to current UKSPF delivery
- Staff redundancy procedures imminent to meet employer responsibilities
Despite previous UK Government commitments to a bespoke approach for Northern Ireland, all indications suggest the majority of Local Growth Funds will be allocated to capital projects. This is deeply concerning and wholly misaligned with local needs and the current UKSPF funding model in NI.
If not redressed this will decimate current sector provision and leave many thousands of vulnerable individuals without access to critical support that is making a demonstrable impact.
With persistently high rates of economic inactivity, Northern Ireland urgently requires:
- Substantially more revenue funding to sustain the impact of current programmes.
- A funding model that reflects local priorities and realities—not a standardised UK-wide formula
Read more about the campaign here NICVA's #NICantWait Campaign - A Future Worth Funding | NICVA
